The American Institute of Architects ("AIA") recently published revisions to its widely used 1997 AIA Contract Documents. In addition to the changes to the general conditions contained in the AIA 201, which were discussed in last month's newsletter, the 2007 AIA Contract Documents replace the owner-architect agreement AIA-B141, Parts 1 and 2, and the AIA-B151 short form owner-architect agreement with the new AIA-B101 2007 Standard Form of Agreement Between Owner and Architect. Engineers and consultants, particularly those who work for architects, should be aware of changes from the 1997 documents to this new form contract because the AIA-B101 will often govern the framework of how design services are provided on building projects.
New language in the B101 (§ 2.2) defines the architect's standard of care as "the professional skill and care ordinarily provided by architects practicing in the same or similar locality under the same or similar circumstances," which is essentially the standard of care implied by law. In the 1997 edition, the standard of care was only vaguely referenced and many parties often added standard of care language to design contracts, sometimes to a standard that was higher than that implied by law. Designers should be aware that a change to the new provision is a modification to the ordinary standard of care.
Another new addition in B101 (§ 2.5) is an explicit requirement for the architect to maintain certain insurance policies at established limits, which are specified by the owner in the agreement. The type of insurance listed in the B101 includes general liability, automobile liability, worker's compensation and professional liability and the owner may chose to include other types of insurance. The contract also provides that where the insurance requirements and limits exceed the types or levels of insurance that the architect normally maintains, the owner is required to reimburse the architect for any additional cost.
The B101 (§ 3.2) also includes new provisions requiring the architect, as part of basic services, to discuss with the owner the feasibility of incorporating environmentally responsible design approaches into the project during the schematic design phase.
Environmentally responsible design alternatives, such as material choices and building orientation are included in basic services, but if the owner requests extensive design alternatives such as unique system designs, in-depth materials research, energy modeling, or LEED® certification, the architect will provide those services as an additional service for additional compensation.
The new B101 contains changes that provide an owner with a more liberal use of the architect's intellectual property (instruments of service) in the event of a termination of the agreement. Under the B101 (Article 7), as long as the owner has paid the architect all amounts due, the owner may use, through a nonexclusive license, the architect's instruments of service to construct, use, maintain, alter, and add to the project in the event of a termination of the agreement. However, if the owner breaches the agreement, the owner loses the license and cannot use the architect's instruments of service. Other provisions related to paying a licensing fee to the architect and liability waivers for continuing to use the instruments of service after termination for convenience or suspension of the project are also included in the B101.
Similar to changes in the A201, the B101 (§ 8.2.4) eliminates mandatory arbitration and allows the parties to "check-the-box" to choose the method of binding dispute resolution, which may be arbitration, litigation, or another agreed upon method. However, if the parties do not check a box, then by default the method of dispute resolution is by litigation through the court system. The B101 still requires non-binding mediation as a condition precedent to binding dispute resolution. Thus, because there are many project specific factors which favor or disfavor arbitration over litigation, the method chosen by the parties should be based on a well reasoned business decision. The new document also includes a provision for joinder of parties in arbitration.
The changes referenced in this article are only some examples of the new and/or modified provisions in the owner architect agreement B101. Owners, architects, engineers and contractors in the building construction industry should become familiar with this new document because it is often used and it has major implications on how design services will be delivered on building projects.
Brian J. O'Rourke is an Associate with the law firm of McCarter & English, LLP in Boston, Massachusetts and may be reached at firstname.lastname@example.org. Brian A. Morgan is an Associate with the law firm of McCarter & English, LLP and may be reached at email@example.com.